Health Insurance Changes On Tax Returns

In their proposed American Health Care Act bill to replace the Affordable Care Act, Republicans have put forward the concept of eliminating taxes for uninsured Americans.

The bill is considered by some congressional members as a work in progress, with not only most Democrats, but also some conservative Republicans, opposing the current legislation.

But while Congress and President Donald Trump’s administration continue to work out the details of the bill, there are other changes that the health insurance market is projected to face.

Following Trump’s executive order authorizing federal agencies to lower the financial burden of complying with Obamacare rules last month, the Internal Revenue Service (IRS) has decided not to systematically reject income tax returns that fail to disclose whether the filer has health insurance.

“The IRS has decided to make changes that would continue to allow electronic and paper returns to be accepted for processing in instances where a taxpayer doesn’t indicate their coverage status,” the IRS released in a statement after the decision was publicized.

The change in tax filing immediately raised the question of whether Americans without coverage would be faced with Obamacare tax penalties.

In past years, tax filers would pay the fee when they filed their federal tax returns for the year in which they didn’t have health coverage, with the possibility of receiving an exemption if they qualified.

Although tax returns will be processed, the IRS change will not affect the penalty, as only a new law could eliminate the fee. The fee is $695 per adult and $347.50 per child—or 2.5 percent of a filer’s household income—depending on which figure is higher.

“The IRS is reminding taxpayers that they are required to follow the law and pay what they may owe,” read the statement.

While the move alleviates the burden on taxpayers, the IRS will follow up with filers with questions at a later date, so that the filing process can be completed and filers will be able to obtain refunds.

According to the IRS, “This is similar to how we handled this in previous years, and this reflects the normal IRS post-filing compliance procedures that we follow.”

The Queens Tribune reached out to several local health providers, but was unable to get comments on potential changes to Obamacare fees in time for press. However, a representative from Northwell Healthcare said that it was difficult to comment on potential changes since they have yet to be finalized or voted into law.